This Week in the Metaverse: NFT-backed loans, led by Blur and Arcade, are making a comeback

At the height of the NFT mania in 2021 and 2022, borrowing money against an NFT, while novel, seemed logical. Prices for non-fungible tokens were through the roof, some in the millions, especially for pieces in top-of-the-line collections like Bored Ape Yacht Club and CryptoPunks.

Advocates like Gabe Frank, CEO of lending platform NFT Arcade, said the concept was clever because people who cleverly (or lucky) came to own multiple NFTs could unlock tax-free liquidity without selling their assets. They could reinvest that liquidity into other NFTs or cryptocurrencies or put it into real-world assets, borrowing against what was then considered a relatively safe digital asset, as long as someone was willing to make the loan, he said.

This year, in the midst of a collapse in the value of some of the largest NFT collections and a still-struggling crypto market, it wasn't clear to me that this concept was still a smart idea.

That hasn't stopped Blur, now the largest NFT marketplace by transaction volume (OpenSea still has more users), introducing its own lending product, Blend, which since its launch earlier this month has already delivered 33,580 Ether. , or about $61. million, worth of loans, according to dune.

Still, while other loan products have focused on relatively longer-term loans, like three or six months, certainly a lot for the high-speed Web3 space, true to its speculative nature, Blur has focused on 24-hour from person to person. personal loans, free of charge for using the platform, where one lender can offload exposure to another at will through a Dutch auction.

While Frank of competitor NFT lender Arcade said Blend's popularity bodes well for the NFT lending ecosystem as a whole, he's not so sure about the model Blur has chosen. He also believes that going forward, floor prices could become increasingly volatile for NFT sets that Blend accepts, such as BAYC, Mutant Ape Yacht club, Azuki, Wrapped Cryptopunks, DeGods, and Miladys.

“It mainly caters to traders and speculators who cultivate [Blur’s] points/rewards system instead of organic lending activity,” Frank told me in an email. "Not so good for collectors or borrowers with 'above the floor' assets looking for fixed-term loans."

For its part, Blur told me via Twitter DM, "Blend offers higher loan amounts and lower interest rates than any other loan protocol on the market."

As for Arcade, to my surprise, he said that the loan business was doing better than expected. The platform had about 7,000 active wallets linked, an estimate for users, Frank told me, compared to Blend's 988 unique borrowers, according to Dune.

Frank said that Arcade has seen even more people willing to lend than people looking for loans due to the high APR (20% on average). I'm still not sure if this model can last, but it opens an interesting window on the possibilities offered by Web3 for the financial world.

Competition between lenders in Arcade is slowly lowering interest rates for borrowers annually, to the point where even Frank has been able to use a CryptoPunk he owned to secure a 9% six-month 45 Ether ($81,600) loan. . APR—less than 9.5% APR on your loan for your Toyota Tacoma.

In other news

Ubisoft licensed a series of assassin's Creed NFTs that will also exist as physical characters inside a cube, according to VGC. The non-expendable tokens represent characters from the games and will be called "digital souls", whose weapons, outfits and appearances can be edited with a companion app. Collectibles are being managed by Integral Reality Laboratories and will be registered in the Polygon block chain.

1/ Smart Collectibles™, a short thread

In this thread, we will be providing technical and ordering information regarding the Smart Collectibles™ that we are very excited to introduce with all of the @assassinscreed fans!

Let's get into it 👇 pic.twitter.com/EY3OJY00W4

— Assassin's Creed Smart Collectibles (@ACSmartCollect) May 11, 2023

sky mavisthe company behind infinity axisreleased a lite version of the Web3 game for mobile that does not require purchasing NFT Axies. Axie Infinity: Origins provides players with "starter" Axies, the furry, fighting protagonists of the game, but players with existing Axies from the desktop version can use theirs as well, decipher reported.

web3 company One of and entertainment world published a series of printed photographs of marilyn monroe that work like NFT. The 40 photos (eight inches by 10 inches) include a Near Field Communication tag on the back that can be used to display each photo's blockchain-backed certificate of authenticity. The photos, from the Kim Goodwin Archive, from $300 each.

chubby penguins released NFT-inspired toys that are already rumored to have generated half a million dollars in revenue. Created by PMI, which also makes products for video games. Fortnite and Among usthe toys are Pudgy Penguin's attempt to reach more mainstream consumers.

Wow @LucaNetz just said in the first 2 days @pudgypenguins sold over $500k worth of penguins in Amazon that's already over 20,000 individual penguin toys 🤯

—Spencer (@sgsand1) May 18, 2023

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